1119.09
Pledging assets.

(A)
To be licensed to operate an agency or
branch in this state, a foreign bank shall pledge assets to the superintendent
of financial institutions, of the kinds, in an amount, and in the manner
prescribed by the superintendent, by placing the assets with a qualified
custodian for safekeeping. The assets pledged are for the benefit of the
agency's or branch's unaffiliated creditors.

(1)
The
value of the assets pledged in accordance with this section shall be computed
based on the lesser of their principal amount or market value.

(2)
In determining the amount of assets a
foreign bank is required to pledge for each agency or branch, the
superintendent shall consider both of the following:

(a)
The amounts necessary or desirable to
maintain a sound financial condition and to protect depositors, creditors, and
the public interest;

(b)
The
concentration of risk to any one borrower or group of related borrowers and the
concentration of transfer risk to any one country, including the country in
which the foreign bank is domiciled.

(C)
A foreign bank that has pledged assets as
required by this section may receive any income paid on those assets while the
foreign bank continues to conduct business in the ordinary course in this state
and the superintendent has not issued a notice prohibiting the foreign bank's
receipt of income paid on the assets the foreign bank has pledged.

(D)
A foreign bank that has pledged assets as
required by this section shall maintain its pledge with the custodian after the
foreign bank ceases to be licensed to operate the agency or branch, until the
superintendent determines that the assets are no longer necessary for the
protection of depositors, creditors, and the public interest.

(E)
To qualify to hold assets pledged as
required by this section, a custodian must be one of the following:

(1)
A federal reserve bank located in this
state or any branch of a federal reserve bank located in this state without
regard to where the branch is located;

(2)
A bank that maintains a banking office in
this state, if approved by the superintendent;

(3)
A trust company that maintains a trust
service office in this state, if approved by the superintendent.

(F)
A custodian of assets pledged
as required by this section shall do all of the following:

(1)
Hold the assets separate from all other
assets of the pledging foreign bank and the custodian;

(2)
Segregate the assets pledged on the
custodian's books and clearly identify them as pledged in accordance with this
section;

(3)
Release the assets
pledged only upon the order of the superintendent or the superintendent's
designee.